G.R. No. 88353 & G.R. No. 92943 , May 8, 1992.
CENTRAL BANK OF THE PHILIPPINES and HON. JOSE B. FERNANDEZ, petitioners, vs. HON. COURT OF APPEALS, RTC JUDGE TEOFILO GUADIZ, JR., PRODUCERS BANK OF THE PHILIPPINES and PRODUCERS PROPERTIES, INC., respondents. ( G.R. No. 88353 )

ATTY. LEONIDA G. TANSINSIN-ENCARNACION, as the Acting Conservator of Producers Bank of the Philippines, and PRODUCERS BANK OF THE PHILIPPINES, petitioners, vs. PRODUCERS BANK OF THE PHILIPPINES, allegedly represented by HENRY L. CO, HON. COURT OF APPEALS, HON. TEOFILO GUADIZ, JR., and the “LAW FIRM OF QUISUMBING, TORRES AND EVANGELISTA” (RAMON J. QUISUMBING, VICENTE TORRES, RAFAEL E. EVANGELISTA, JR. and CHRISTOFER L. LIM), respondents. ( G.R. No. 92943 )

FACTS

The common origin is Civil Case No. 17692 before the RTC of Makati. In 1983, Central Bank (CB) examiners discovered that Producers Bank of the Philippines (PBP) had extended approximately P300 million in “fictitious” and unsecured loans to entities related to its owners, exceeding its paid-in capital of P140.544 million. News items triggered a bank run, causing PBP’s overdraft with the CB to reach P143.955 million by January 1984. Consequently, the Monetary Board (MB), pursuant to Section 28-A of R.A. No. 265 , placed PBP under conservatorship via MB Resolution No. 164 on January 20, 1984. PBP submitted to conservatorship but requested its lifting. The MB set conditions for lifting, including collateralization of PBP’s overdraft into an emergency loan. PBP submitted a rehabilitation plan in June 1984, but no acceptable program was agreed upon. By June 1987, PBP’s overdraft swelled to P1.023 billion. On July 3, 1987, the MB approved in principle a rehabilitation program under MB Resolution No. 649, which involved converting the overdraft into preferred shares of PBP stock, assigning claims to the Philippine Deposit Insurance Corporation (PDIC), and requiring fresh capital. On July 17, 1987, the MB issued Resolution No. 751, giving PBP until July 31, 1987, to signify acceptance, otherwise, the CB would take “appropriate alternative action.” PBP and its principal stockholder, Producers Properties, Inc. (PPI), filed a complaint with the RTC (Branch 147, Judge Teofilo Guadiz, Jr.) against the CB, Jose B. Fernandez, Jr., and the Monetary Board, challenging the conservatorship and the rehabilitation program, and seeking a writ of preliminary injunction. On September 21, 1987, the RTC granted the injunction, enjoining the implementation of MB Resolutions Nos. 649 and 751. The CB’s motion to dismiss and vacate the injunction was denied on October 27, 1987. The CB filed a petition for certiorari with the Court of Appeals (CA-G.R. SP No. 13624), which on October 6, 1988, upheld the RTC’s orders. The CA denied reconsideration on May 17, 1989. The CB then filed G.R. No. 88353 before the Supreme Court. Meanwhile, in the RTC case, the conservator, Atty. Leonida G. Tansinsin-Encarnacion, and PBP (under conservatorship) filed a motion to dismiss the complaint, which the RTC denied. They filed a petition for certiorari with the Court of Appeals (CA-G.R. SP No. 16972), which was dismissed on January 17, 1990. The CA sustained the RTC’s orders but directed the plaintiffs to amend their complaint to state the specific amount of damages and for the Clerk of Court to determine the correct filing fees. This led to the filing of G.R. No. 92943 . The Supreme Court consolidated the two cases.

ISSUE

The primary issues involve: (1) the propriety of the writ of preliminary injunction issued by the RTC enjoining the implementation of the MB’s rehabilitation program (Resolutions Nos. 649 and 751); (2) the jurisdiction of the RTC over the subject matter of the complaint challenging the CB’s actions; and (3) the correctness of the CA’s decision in G.R. No. 92943 regarding the amendment of the complaint for damages and payment of filing fees.

RULING

The Supreme Court ruled in favor of the petitioners (Central Bank, et al.) in G.R. No. 88353 and set aside the decision of the Court of Appeals. It ruled that the Regional Trial Court had no jurisdiction over the subject matter of the complaint. Actions seeking to set aside, annul, or modify any order or decision of the Monetary Board are within the exclusive original jurisdiction of the Court of Appeals pursuant to Section 29 of Republic Act No. 265 , as amended. The complaint, which essentially challenged the conservatorship and the rehabilitation program ordered by the Monetary Board, fell within this exclusive jurisdiction. Therefore, the RTC acted without jurisdiction in issuing the writ of preliminary injunction and in taking cognizance of the case. The injunction was improperly issued. Consequently, the Court made the injunction permanent and ordered the dismissal of Civil Case No. 17692. Regarding G.R. No. 92943 , the Supreme Court dismissed the petition, finding no grave abuse of discretion in the Court of Appeals’ decision. The CA correctly directed the amendment of the complaint to specify the amount of damages and the payment of appropriate filing fees, as the original prayer for “actual, moral, and exemplary damages in amounts to be proved during the trial” did not specify a sum and was insufficient for determining the correct filing fees. The Court also held that the conservator, as the lawful representative of PBP, had the sole right to bring suits for the bank, and the complaint filed by Henry L. Co allegedly on behalf of PBP was unauthorized.